nep-hrm New Economics Papers
on Human Capital and Human Resource Management
Issue of 2006‒03‒25
twenty-two papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Measuring the Specificity of Human Capital: a Skill-based Approach By Kristjan-Olari Leping
  2. Human Capital and Social Position in Britain: creating a measure of wage earning potential from BHPS data By Jonathan Gershuny; Man Yee Kan
  3. Intergenerational transmission of the human capital: case of the heterogeneous families By Boubaker Hlaimi
  4. Education and Regional Job Creation by the Self-Employed: The English North-South Divide By Andrew E. Burke; Michael A. Nolan; Felix R. FitzRoy
  5. Endogenous skill formation in developing countries By Rossana Patrón
  6. Public education and growth: cost-effectiveness of educational policies in developing countries By Rossana Patrón
  7. Overeducation in the Australian Labour Market: Its Incidence and Effects By Ingrid Linsley
  8. A Human Capital-Based Theory of Post Marital Residence Rules By Matthew J. Baker; Joyce P. Jacobsen
  9. Competition and Public School Efficiency in Sweden By Waldo, Staffan
  10. Regional school comparison and school choice : how do they relate to student performance ? Evidence from PISA 2003 By Maresa, SPRIETSMA
  11. Causes of Overeducation in the Australian Labour Market By Ingrid Linsley
  12. Online Format vs. Live Mode of Instruction: Do Human Capital Differences or Differences in Returns to Human Capital Explain the Differences in Outcomes? By Oskar R. Harmon; James Lambrinos
  13. Does More Generous Student Aid Increase Enrolment Rates into Higher Education? Evaluating the German Student Aid Reform of 2001 By Hans J. Baumgartner; Viktor Steiner
  14. Reconstructing School Segregation: On the Efficacy and Equity of Single-Sex Schooling By Sherrilyn M. Billger
  15. School Vouchers and Public School Productivity - The Case of the Swedish Large Scale Voucher Program By Waldo, Staffan
  16. Marriage, Specialization, and the Gender Division of Labor By Matthew J. Baker; Joyce P. Jacobsen
  17. Ethnic segregation and educational performance at secondary school in Bradford and Leicester By Ron Johnston; Deborah Wilson; Simon Burgess
  18. Religion and High School Graduation: A Comparative Analysis of Patterns for White and Black Young Women By Evelyn L. Lehrer
  19. Mexican Entrepreneurship: A Comparison of Self-Employment in Mexico and the United States By Robert W. Fairlie; Christopher Woodruff
  20. Where are they Now? Tracking the Ph.D. Class of 1997 By Wendy A. Stock; John J. Siegfried
  21. 'Making Work Pay' in a Rationed Labour Market By Olivier Bargain; Marco Caliendo; Peter Haan; Kristian Orsini
  22. On the Returns to Occupational Qualification in Terms of Subjective and Objective Variables : A GEE-type Approach to the Estimation of Two-Equation Panel Models By Martin Spieß

  1. By: Kristjan-Olari Leping (University of Tartu Pärnu College)
    Abstract: In this article a skill-based measure for human capital specificity will be constructed. This measure is based on the possibilities of making use of skills on labour market and it depends on the number of jobs where the particular skill is required. It is assumed that the specificity of human capital depends on the specificity of skills. In order to calculate the levels of specificity of different skills empirically, the data from the skill requirements of vacant jobs are used. The validity of this measure is tested by using it as an estimator of the probability that on-the-job training is offered to employees. The differences in the specificity of required human capital between different industries and occupations are also investigated in this paper. The proposed job specificity measure can be used for planning the public sector support to on-the-job training as the companies’ decisions to pay for training depend on the specificity of required human capital.
    Keywords: human capital, skills, on-the-job training
    JEL: J24 M53
    Date: 2005
  2. By: Jonathan Gershuny (Institute for Social and Economic Research); Man Yee Kan (Institute for Social and Economic Research)
    Abstract: This paper develops a continuously scaled indicator of social position (the Essex Score), which is estimated as individuals’ potential wage in the labour market. The Essex Score is designed as a tool to investigate patterns of differentiation in life chances. It is constructed based on individuals’ educational qualifications, recent experience in employment and non-employment, and occupational attainment using data from all the currently available 13 waves of the British Household Panel Survey. The Essex Score represents those embodied economic resources salient to individuals’ participation in the labour market, equivalent to “human capital” in economic literature, and sometimes indicated by social class categories in sociological research. It has advantages over other social class measures. Being based on educational levels and on degrees of present and past attachment to the labour market as well as on present or previous occupational membership, it covers the entire adult population irrespective of their employment status and employment history. Its continuous level measurement also allows aggregation of scores from an individual to a household level, as well as the sensitive investigation of the determinants and consequences of changes in social position during the life course.
    Keywords: bhps, human capital, social class
    Date: 2006–02
  3. By: Boubaker Hlaimi (LEST - Laboratoire d'économie et de sociologie du travail - - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II] - [])
    Abstract: The objective of this paper is to analyse the intergenerational transmission mechanisms within a theoretical framework which presumes a heterogeneous family structure. For that, we propose a modified version of the Becker and Tomes model (1986) by assuming that there are two groups of children: the elder and the juniors. We try to see how according to the elder achievement, the parents modify their choices of education or of training for the juniors given returns and endowments.
    Keywords: Intergenerational transmission; Human capital; Ability
    Date: 2006–03–15
  4. By: Andrew E. Burke; Michael A. Nolan; Felix R. FitzRoy
    Abstract: Using decomposition analysis, the paper investigates the reasons why Northern England has less but higher performing self-employed businesses than the South. It finds the causes are mainly structural differences rather than due to regional variation in people's characteristics. The paper also unearths a regional dimension behind the impact of education on entrepreneurial job creation. It finds that, in the less developed North, education boosts self-employment job creation by enhancing performance per venture (quality). In the South, it reduces it by having no effect on quality alongside a negative effect on the number of people who become self-employed (quantity).
    Keywords: Self-employment, job creation, North-South divide, decomposition
    JEL: J23 R11 R23
    Date: 2006–03
  5. By: Rossana Patrón (Departmento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The paper provides a flexible framework to deal with educational provision and public policies in developing countries, linking the impact of quality-quantity-equity of educational policies on labour markets and the external sector. The model includes typical aspects of developing countries that require some further deviations from the structure of a 'standard' single country model as the inclusion of informal activities, which are usually dominated by the poorest qualified workers. Simulation exercises allows us to argue that more sophisticated educational policies ("multiple targets") may increase the efficiency of the government expenditure in education in terms of the quantity-quality of the output (skills) delivered to the labour market. The potential of education and educational policies to produce allocative, growth and distributive effects is also shown in the simulation exercises.
    Keywords: public education, educational policies, developing countries
    JEL: I F
    Date: 2005–05
  6. By: Rossana Patrón (Departmento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The paper analyses the short and long term effects of education activities for an open economy, linking current costs to future benefits of alternative educational policies. The simulations find that growth effects are higher for those policies that reduce the internal inefficiency of the education sector thus improving the productivity of public expenditure. The analysis has implications for policymakers in developing countries like Uruguay with failing educational systems, as it suggests a relation between cost effectiveness of policies and growth and not a relation between enrolments and growth or between public expenditure in education and growth as it is usually tested in growth regressions.
    Keywords: public education, growth, developing countries
    JEL: I F O
    Date: 2005–10
  7. By: Ingrid Linsley
    Abstract: Overeducation is a form of labour underutilisation which occurs when the formal education level of a worker exceeds that which is required for the job. It is a form of underemployment that imposes significant costs on individuals and economies. Using data from the Negotiating the Life Course survey this study determines the incidence and effects of overeducation in the Australian labour market. This study found that 27.1 per cent of individuals are overeducated, and the incidence is higher among those who are young, have preschool-aged children, work in large firms and have fewer years of tenure. A positive relationship was also found between timerelated and skill-related underemployment. Overeducation is found to impose costs on individuals, reducing earnings by between 10 and 20 per cent and lowering job satisfaction.
    Keywords: I21 J23 J24 J31
    Date: 2005
  8. By: Matthew J. Baker (United States Naval Academy); Joyce P. Jacobsen (Economics Department, Wesleyan University)
    Abstract: In pre-modern societies the residence of a newly-wedded couple is often decided by custom. We formulate a theory of optimal post-marital residence rules based on contracting problems created by the nature of pre-marriage human capital investments. We argue that a fixed post-marital residence rule may mitigate a hold-up problem by specifying marriage terms and limiting possibilities for renegotiation; the trade-off is that the rule may prohibit beneficial renegotiation of post-marital location. A point of interest of our approach is that the magnitude and direction of transfers accompanying marriage are endogenous. We apply our theoretical results to understanding cross-cultural post-marital residence patters. We find some predictive ability in variables related to outside options, control over the environment, and potential degree of social control.
    Keywords: Marriage, Bargaining, Hold-up Problem, Dowry, Bride-Price
    JEL: J12 J41
    Date: 2005–09
  9. By: Waldo, Staffan (Swedish Institute for Food and Agricultural Economics)
    Abstract: The focus in this study is on how efficiency in public education is affected by competition from private schools. The Swedish educational system is used, since the Swedish large scale voucher program implies that private and public schools compete on similar terms. In 2002 approximately 5% of the Swedish children attended private schools, and the share is rapidly increasing. Public school efficiency is estimated using Data Envelopment Analysis (DEA). Modelling education is difficult since educational production is not only dependent on factors under control of the school management, but also on the students’ socio-economic backgrounds. A number of approaches have been proposed concerning how to model this in a DEA setting. In this study, four different approaches are used and compared. Special focus is put on a second stage regression, where the efficiency estimates are regressed on competition and other explanatory variables. We can not show that the share of children attending private schools is related to public school performance.
    Keywords: Data Envelopment Analysis; competition; education
    JEL: H73 I21
    Date: 2006–03–23
  10. By: Maresa, SPRIETSMA (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: School choice and accountability have become popular educational policies in the US and the UK. In Europe, such policies are less often applied and therefore less subject to research. The present paper uses recent international data to study the impact of schools comparing their pupil’s results to a regional or national performance standard and that of regional school choice on student test scores. School performance comparisons and school choice by parents are assumed to complement each other in increasing both school and teacher effort. We estimate an education production function controlling for the hierarchical nature of the data. We also estimate our model using quantiles of student test scores to identify potentially different effects at different levels of student performance. We find that both a higher regional percentage of schools comparing their results and regional intensity of school choice significantly improve student test scores. This positive effect varies in size according to whether we consider low or high-performancing students.
    Keywords: School choice; school performance standards; education production function; pupil performance; hierarchical models
    JEL: I20 I28
    Date: 2006–02–15
  11. By: Ingrid Linsley
    Abstract: Overeducation is a form of labour underutilisation which occurs when the formal education level of a worker exceeds that which is required for the job. In Australia close to 30 per cent of workers are overeducated and are underutilising their skills. Using data from the Negotiating the Life Course survey, this study determines the causes of overeducation in Australia. Four of the key theories that have been used to explain overeducation are tested: human capital, job competition, assignment and the career mobility theories. Tests show that the job competition model best explains the existence of overeducation in the Australian labour market.
    Keywords: Overeducation, labour market, human capital theory, career mobility
    JEL: I21 J24 J62
    Date: 2005
  12. By: Oskar R. Harmon (University of Connecticut); James Lambrinos (Union University)
    Abstract: Our paper asks the question: Does mode of instruction format (live or online format) effect test scores in the principles of macroeconomics classes? Our data are from several sections of principles of macroeconomics, some in live format, some in online format, and all taught by the same instructor. We find that test scores for the online format, when corrected for sample selection bias, are four points higher than for the live format, and the difference is statistically significant. One possible explanation for this is that there was slightly higher human capital in the classes that had the online format. A Oaxaca decomposition of this difference in grades was conducted to see how much was due to human capital and how much was due to the differences in the rates of return to human capital. This analysis reveals that 25% of the difference was due to the higher human capital with the remaining 75% due to differences in the returns to human capital. It is possible that for the relatively older student with the appropriate online learning skill set, and with schedule constrains created by family and job, the online format provides them with a more productive learning environment than does the alternative traditional live class format. Also, because our data are limited to the student s academic transcript, we recommend future research include data on learning style characteristics, and the constraints formed by family and job choices.
    Keywords: economic education, distance education, online instruction, pedagogy
    JEL: A2
    Date: 2006–03
  13. By: Hans J. Baumgartner (DIW Berlin); Viktor Steiner (Free University of Berlin, DIW Berlin and IZA Bonn)
    Abstract: Students from low-income families are eligible to student aid under the federal students’ financial assistance scheme (BAfoeG) in Germany. We evaluate the effectiveness of a recent reform of student aid that substantially increased the amount received by eligible students to raise enrolment rates into tertiary education. We view this reform as a ‘natural experiment’ and apply the difference-in-difference methodology using a discrete-time hazard rate model to estimate the causal effect on enrolment rates into higher education. We find that the reform had a small positive but statistically insignificant effect on enrolment rates.
    Keywords: educational transitions, educational finance, natural experiment and difference-indifference estimation
    JEL: H31 I28 I22 J24
    Date: 2006–03
  14. By: Sherrilyn M. Billger (Illinois State University and IZA Bonn)
    Abstract: A change to Title IX has spurred new single-sex public schooling in the US. Until recently, nearly all gender-segregated schools were private, and I therefore address potential selection bias in the effects on educational and labor market outcomes using within private sector comparisons, an index comparing expectations to outcomes, quantile regressions, and other techniques. Descriptive statistics suggest significant benefits, but more consideration of selection bias reveals less consistency. Girls' school alumnae are more likely than their coed peers to receive scholarships, but they are not more likely to pursue college degrees, and both genders are less likely to meet their own educational expectations. Moreover, single-sex schooling is not universally superior in supporting gender equity, as coeducational public schools yield the least segregated college major choices. On the other hand, I find 15-20% higher starting salaries among single-sex school graduates, but only persistently for men of median ability. Much of the benefit from single-sex schooling accrues to students already likely to succeed, but favorable selection is an insufficient explanation for all gains. Most notably, there are clear returns for both African-Americans and low income students.
    Keywords: single-sex education, labor outcomes, secondary schooling, gender
    JEL: I21 J24 J3 I28
    Date: 2006–03
  15. By: Waldo, Staffan (Swedish Institute for Food and Agricultural Economics)
    Abstract: Since the school voucher reform in 1992/93 Sweden has experienced a rapid increase in private schools. School regulations allow private and public schools to compete for students on very similar terms. This makes the Swedish educational market interesting for studying how competition affects the provision of education. In this study competition and public school productivity are analyzed for 105 urban municipalities during the period 1998/99 to 2001/02. The empirical estimations are performed in two stages. In the first stage, productivity is estimated using Data Envelopment Analysis (DEA) and a Malmquist productivity index. In the second stage, the estimated productivity is regressed on private school competition and a number of control variables. We cannot reject competition to be exogenous in a Hausman test. The coefficient for competition is not significant at the 5 percent level in any of the empirical specifications.
    Keywords: Malmquist index; competition; education
    JEL: H73 I21
    Date: 2006–03–23
  16. By: Matthew J. Baker (Department of Economics, United States Naval Academy); Joyce P. Jacobsen (Department of Economics, Wesleyan University)
    Abstract: A customary gender division of labor is one in which women and men are directed towards certain tasks and/or explicitly prohibited from performing others. We offer an explanation as to why the gender division of labor is so often enforced by custom, and why customary gender divisions of labor generally involve both direction and prohibition. Our model builds on the literature on the marital hold-up problem, and considers both problems in choice of specialty and human capital acquisition in a framework in which agents learn a variety of skills and then enter the marriage market. We show that wasteful behavior may emerge due to strategic incentives in career choice and human capital acquisition, and that both problems may be mitigated through the customary gender division of labor. We find, however, that a gender division of labor is not Pareto-improving; one gender is made worse off. Both the distributional effects and welfare gains of a customary gender division of labor decrease as opportunities to exchange in markets increase.
    Keywords: earnings inequality, income inequality, gender, race, and ethnicity differences
    JEL: D3 I3 J15
    Date: 2005–02
  17. By: Ron Johnston; Deborah Wilson; Simon Burgess
    Abstract: Evidence suggests considerable variation among British ethnic groups in their performance at different stages of their educational careers. Many members of those groups are concentrated in particular parts of certain cities, and as a consequence many attend ethnically-segregated schools. Using pupil- and school-level data from the Pupil Level Annual School Census (PLASC) in England, this paper explores the relationship between performance and various student and school characteristics in Bradford (which has a large Pakistani population) and Leicester (with a large Indian population). It finds evidence of a correlation between school ethnic composition and performance in Bradford but not Leicester.
    Keywords: ethnic segregation, schools, attainment levels, Bradford, Leicester
    JEL: I20
    Date: 2006–03
  18. By: Evelyn L. Lehrer (University of Illinois at Chicago - Economics Department)
    Abstract: This paper examines how two dimensions of childhood religion—affiliation and participation—are related to the probability of graduating from high school. Hypotheses derived from a human capital model are tested with data on non-Hispanic white and black women from the 1995 National Survey of Family Growth. The empirical findings are generally consistent with the hypotheses, revealing sizeable differentials in the likelihood of obtaining a high-school diploma by affiliation and participation. The results suggest that the convergence of Catholics to the mainline Protestant pattern for non-Hispanic whites found here, and supported by many previous studies, has not taken place in the black population. In other respects, the relationships between religion and high school graduation are similar for the two racial groups.
    Keywords: religion; education; high-school graduation.
    JEL: J24 J15 J22
    Date: 2006–03–14
  19. By: Robert W. Fairlie (University of California, Santa Cruz and IZA Bonn); Christopher Woodruff (University of California, San Diego)
    Abstract: Nearly a quarter of Mexico's workforce is self employed. In the United States, however, rates of self employment among Mexican Americans are only 6 percent, about half the rate among non-Latino whites. Using data from the Mexican and U.S. population census, we show that neither industrial composition nor differences in the age and education of Mexican born populations residing in Mexico and the U.S. accounts for the differences in the self employment rates in the two countries. Within the United States, however, estimates indicate that low levels of education and the youth of Mexican immigrants residing in the United States account for roughly half of the Mexican immigrant/U.S. total difference in selfemployment rates for men and the entire difference for women. We also find some suggestive evidence that for both men and women, Mexican immigrant self-employment rates may be higher for those who reside in the United States legally and are fluent in English, and for men, those who live in ethnic enclaves.
    Keywords: entrepreneurship, self-employment, Mexico, Mexican-Americans
    JEL: J15 J23
    Date: 2006–03
  20. By: Wendy A. Stock (Department of Economics and Agricultural Economics, Montana State University); John J. Siegfried (Department of Economics, Vanderbilt University and AEA)
    Abstract: We report early career outcomes of economics Ph.D.s by tracking the U.S. class of 1996-97. We examine employment outcomes, work activities, salaries, and graduates' attitudes toward their jobs. By 2003, all of the respondents were employed, although almost half changed employers during the six years. Salaries of the cohort increased at an average annual rate of 8.2 percent from 1997 through 2003. Academic-year salaries rose about 5.7 percent per year, while private sector salaries skyrocketed at 15 percent per year. Finally, the median salaries of first-year full-time permanent 9-10 month academic economists hired in 2002-03 actually exceed the 2003 salaries of their counterparts initially hired in 1997-98. Some of this apparent salary inversion reflects a different mix of employers and departments between the two cohorts, with the younger group securing relatively more jobs at higher paying institutions.
    Keywords: Economists, employment, salaries
    JEL: A11 J44 J40 J30
    Date: 2006–03
  21. By: Olivier Bargain (IZA Bonn); Marco Caliendo (DIW Berlin and IZA Bonn); Peter Haan (DIW Berlin); Kristian Orsini (K.U. Leuven)
    Abstract: We assess the labour supply effects of two ‘making work pay' reforms in Germany. We provide evidence in favour of policies that distinguish between low effort and low productivity by targeting individuals with low wages rather than individuals with low earnings. In assessing the policies we account for demand-side constraints by using a double-hurdle model. We identify and decompose the potential bias of labour supply elasticities derived in standard unconstrained models. Although this bias is not significant when assessing policies which mainly target voluntarily unemployed workers (typically secondary earners), it is substantial for policies which affect groups with high shares of involuntary unemployment.
    Keywords: tax-benefit systems, microsimulation, household labour supply, multinomial logit, involuntary unemployment, double-hurdle
    JEL: C25 C52 H31 J22
    Date: 2006–03
  22. By: Martin Spieß

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